Coinbase’s institutional arm has predicted that the crypto market could recover this month after a significant downturn last month. The firm further outlined reasons the market could rebound, including improved liquidity, with the Fed notably ending quantitative tightening (QT).
Coinbase Predicts A December Recovery For Crypto Market
In an X post, Coinbase institutional stated that the crypto market may be poised for a December recovery as liquidity improves. The firm’s research team noted that odds of a Fed rate cut are at new highs while macro tailwinds build.
It’s beginning to look a lot like a recovery.
We think crypto could be poised for a December recovery as liquidity improves, Fed cut odds jump to 92% (as of Dec 4), and macro tailwinds build.
Here’s why:
• Liquidity is recovering
• The supposed “AI bubble” hasn’t burst… pic.twitter.com/CpbfijdKWQ— Coinbase Institutional 🛡️ (@CoinbaseInsto) December 5, 2025
As CoinGape reported, the odds of a 25-basis-point rate cut are currently around 90%, indicating that the Fed is likely to lower rates at next week’s FOMC meeting. This presents a bullish outlook for the market, especially as the Fed already ended quantitative tightening on December 1.
Meanwhile, Coinbase Institutional also stated that the supposed “AI bubble” hasn’t burst and looks to still have room to run, which is another reason they expect the crypto market to recover this month. The research team added that short USD trades are attractive at current levels.
Meanwhile, they alluded to a prior research note, in which they teased a positioning reset for the crypto market while citing their custom M2 index, anticipating November weakness and a December reversal. In line with this, the top crypto exchange declared that this could be the starting line for the market momentum to reassert itself.
Another Indicator For A Major Rebound
Crypto expert Ash Crypto also provided a bullish outlook for the crypto market. In an X post, he stated that the Russell 2000 is the biggest indicator for Altseason and that it is about to hit a new all-time high.
Russell 2000 is the biggest indicator for Altseason, and it’s about to hit a new all-time high.
Same Cycle, Same Breakout Point
– Both Russell 2000 and ALTS MCAP peaked in Nov 2021, marking the cycle top.
– Both entered a long bear market (2022–2023).
– Now, Russell is… pic.twitter.com/deJeXVnj2v— Ash Crypto (@AshCrypto) December 6, 2025
The expert noted that both the Russell 2000 and Altcoin market cap peaked in November 2021, marking the cycle top followed by a long bear market between 2022 and 2023. Now, the Russell is retesting its November 2021 highs, which is a key resistance zone. Ash Crypto added that a breakout above these levels confirms the start of a major bull run in 2026.
He further remarked that history shows that the US alts market (Russell 2000) and crypto altcoins often move in sync. As such, if the Russell breaks out, the expert expects the Ethereum price and other altcoins to follow.
Ash Crypto also stated that the crypto market is in a state of fear following the 10/10 flash crash and that all leverage is flushed, which he claimed means it is a perfect scenario for a parabolic pump to start. He added that market participants must keep an eye on the Russell as it will give an idea of how altcoins will move in the coming weeks.